Borrowing

Last Updated: 4/13/2010

How do we request an advance from the Discount Window?

Requesting an advance requires a simple phone call to your Reserve Bank.

Please be prepared to supply the following information:
  • Name and location (city and state) of your institution.
  • Your institution's ABA and telephone number.
  • Your name and title. If your institution's borrowing resolution requires that two people request a Discount Window loan, please have a second authorized individual available.
  • The type of credit you are requesting.
  • The amount of the advance you are requesting.
  • The number of days that funds will be needed.
Discount Window staff may request additional information.

Type of Credit

  • Primary Credit - No questions asked.
  • Secondary Credit - Additional information regarding the financial condition of the institution and the reason for borrowing may be necessary to complete the request.
  • Seasonal Credit - Institution must have an approved seasonal line of credit.

Who is authorized to borrow?

Your institution must specify who is authorized to borrow funds in the legal agreements submitted for access to the Discount Window. The Authorizing Resolution for Borrowers and the Signature Card (when applicable) contain the names of the individual(s) that are authorized. In some cases more than one person is required to authorize an advance.

How long can we borrow for?
  • Primary credit is extended on a very short-term basis, usually overnight. It may also be extended for up to a few weeks to depository institutions in generally sound financial condition that cannot obtain temporary funds in the market at reasonable terms; normally these are small institutions. Longer-term extensions of credit are subject to increased administration.
  • Secondary credit is extended on a very short-term basis, usually overnight. It may also be extended for a longer term if such credit would facilitate a timely return to reliance on market funding or the orderly resolution of a failing institution, subject to statutory requirements (FDICIA restrictions).
  • Under the seasonal program, borrowers may obtain longer-term funds from the Discount Window during periods of seasonal need so they can carry fewer liquid assets during the rest of the year and make more funds available for local lending. A seasonal line is granted for a period of up to nine months. However, advances will mature on a monthly basis.
How is borrowing repaid?

An advance is issued with a stated maturity date. Discount Window loans must be repaid on the maturity date or, at the lending Reserve Bank's discretion, upon demand. Repayment of principal and accrued interest is charged to the account to which the loan was posted. (Details on use of a correspondent account for loan and payment debits and credits are contained in Appendix 5 of Operating Circular No. 10offsite link). Multi-day advances, however, can be prepaid in whole or in part at the borrowing institution's option.

Please be prepared to supply the following information to a Discount Window representative when calling to prepay:
  • Name and location (city and state) of your institution.
  • Your institution's ABA and telephone number
  • Your name and title
  • The amount of the prepayment being requested.
Prepayment amounts will be applied sequentially to the loans that have been outstanding the longest.


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